Infosys' Q4 PAT seen down 4% at 2277cr: MOST

Motilal Oswal has come out with its earnings estimates on Infosys for March quarter FY12. According to the research firm, the company's Q4FY12 sales are likely to go down by 2.4% at Rs 9071 crore, Quarter-0n-Quarter (QoQ) basis.

The company's net profit is seen down 4% at Rs 2277 crore, QoQ.

Motilal Oswal's estimates on Infosys Q4 results:

We expect Infosys’ 4QFY12 USD revenue to be flat at USD1,808m, in-line with the company’s guidance. INR revenue is expected to decline 2.6% QoQ to INR90.7b.

- Flat revenue, INR appreciation and continued hiring are expected to pull EBITDA margin down by 100bp QoQ to 32.7%.

- We expect 4% sequential drop in PAT to INR22.8b. Our EPS estimate of INR39.86 is lower than INR42.1 guided by the company due to a marked difference in the UDS-INR rate assumed by the company in its guidance (INR52) and our assumption (INR50.16).

- We expect Infosys to guide for 1.5-3.5% QoQ growth in USD revenue for 1QFY13. For the full year, we expect growth guidance of 12-15% for USD revenues, a wider range to capture the volatility.

- The stock trades at 16.4x FY13E and 14.8x FY14E earnings. Maintain Neutral with a target price of INR3,060, which discounts our FY14E earnings by 17x.

Key things to watch out for:

FY13 and 1QFY13 guidance on revenue and margins, hiring guidance, commentary on discretionary spends and pricing in BFSI

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